Legend Group Limited

1. Legend Group Limited 2002/03 Fiscal Year Interim Results Announcement Business and Financial Review Ms. Mary Ma Senior Vice-President & CFO November 12, 2002

2. Overview • Turnover for the first half of FY2002/03 increased by 4.1% to HK$10.37 billion, from HK$9.96 billion for the corresponding period of last year • Profit attributable to shareholders increased to HK$524 million, or 20.5%, compared to the proforma profit of the same period last year of HK$435 million • Gross margin is 15.02%, up from proforma gross margin of 13.72% of the same period last year • Net profit margin increased from 4.37% (proforma) to 5.06% • The Board of Directors proposed an interim dividend of 1.8 HK cents per share

3. Overview • Turnover for FY2002/03 Q2 increased by 2.3% to HK$5.57 billion, from HK$5.45 billion for the corresponding period of last year • Profit attributable to shareholders increased to HK$256.3 million, or 26.5%, compared to the proforma profit of the same period last year of HK$202.6 million • Gross margin is 14.61%, up from proforma gross margin of 12.28% of the same period last year • Net profit margin increased from 3.72% (proforma) to 4.6%

4. 2002/03 Interim Consolidated P&L Account Proforma results: The proforma results are prepared on the basis as if the demerger of Digital China has been completed as at March 31, 2000, and hence its results are not consolidated in the Group’s proforma results of FY2001/02.

5. 2002/03 Interim Turnover Breakdown Contract Manufacturing(Note 2)4.1% (9.0%) IT Services0.7% (0%) Handheld Device (Note 1)6.4% (1.3%) Consumer IT 35.2% (39.7%) Corporate IT 53.6% (49.7%) Note 1: Starting from FY2002/03, contribution from handheld device business includes the contribution from mobile handset business. Note 2: Legend sold 55% of Legend Techwise (PCB) in Jan 2002. Hence, the contribution from contract manufacturing business in FY2002/03 interim does not include any contribution from Legend Techwise. Note 3: FY2001/02 interim proforma figures are in brackets. Internet service business contributed about 0.3% in FY2001/02 interim. Legend-AOL JV was formally set up on Nov 20, 2001. Hence, the contribution from Internet service is not included in the consolidated turnover for FY2002/03.

6. Changes in Turnover Breakdown Note 4: Legend sold 55% of Legend Techwise (PCB) in Jan 2002. Hence, the contribution from contract manufacturing business in FY2002/03 interim does not include any contribution from Legend Techwise. Note 5: Contribution from Internet service for FY2001/02.

7. Changes in Proforma Turnover Breakdown Note 4: Legend sold 55% of Legend Techwise (PCB) in Jan 2002. Hence, the contribution from contract manufacturing business in FY2002/03 Q2 does not include any contribution from Legend Techwise. Note 5: Contribution from Internet service for FY2001/02.

8. Changes in Proforma Operating Profit Breakdown Note 6: Operating profit for FY2002/03 interim before amortization of intangible assets and gains on disposal of investment securities.

9. Changes in Proforma Operating Profit Breakdown Note 6: Operating profit for FY2002/03 Q2 before amortization of intangible assets and gains on disposal of investment securities.

10. Interim Gross Margin Analysis Corporate IT Consumer IT Handheld Access Devices IT Service Contract Manufacturing Group Note: Before elimination of inter-company transaction, the gross margin of contract manufacturing business is 10.2% (2001/02 Interim: 15%).

11. Q2 Gross Margin Analysis Corporate IT Consumer IT Handheld Devices IT Service Contract Manufacturing Group Note: Before elimination of inter-company transaction, the gross margin of contract manufacturing business is 10.8% (2001/02 Q2: 15.2%).

12. Consolidated Balance Sheet

13. Key Financial Figures

14. Key Financial Figures

15. Legend Group Limited 2002/03 Fiscal Year Interim Results Announcement Market and Business Review Mr. Yang Yuanqing President & CEO November 12, 2002

16. Business Review • China’s PC market recovers to healthy growth • PC unit shipment growth in Q1, Q2 and Q3 for 2002 was 4.8%，9.6% and 22.3%, respectively (April to September grew by 16%) • Unit shipment of Corporate market in April to September are estimated to grow by 21%, driven by robust growth in“School Link”, e-government and SMEs. • Consumer PC market was relatively less dynamic. Unit shipment in April to September are estimated to grow by 8% • Legend’s management is confident with the growth potential of China IT market • China’s accession to WTO speed up the pace of informatization of enterprises for increasing competitiveness • E-government implementation is in full force, y-o-y growth of government spending on IT will exceed 25%

17. Business and Strategy Review • Legend PC sales growth in line with market, gross margin and net margin increased significantly, 1H FY02/03 y-o-y growth up from 13.72% and 4.37% to 15.02% and 5.06%, respectively while market share continue to rise • Legend PC unit shipment grew 17% in 1HFY02/03 (April to September 2002), Q1 and Q2 reported 10% and 22.5% growth, respectively • Legend home PCs, commercial desktop PCs, notebooks and servers increased significantly: Notebooks 17.2% Home PCs 5.4% Commercial desktop PCs 25.9% Servers 41.7%

18. Successful operating strategy Legend’s strategy  Service-oriented and technology innovations Customer driven Emphasis on tailor-made applications and user-friendly products and services Bigger room for profit growth Increase Value-add Service Technology Reduce Cost Precise and effective process management • Healthy growth and profitability as prime target • Precise process management, value-added services and technology innovations balance growth (cost reduction and value enhancement) • Synergy between new and existing businesses

19. Terminal Devices (Pocket PCs, PDAs, mobile handsets, digital cameras) PC Back-office Products High-end servers, storage, network securities products Server Services • Consumers • Small & Medium scale clients • Large scale clients Value-added service (Product pre-sales / after-sales services) Service Business Strategy Review

20. Dream factory software Digital home work pack Win XP operating system LEOS operating system Business Review Development of terminal device • Launch of “Dual Mode” home PC • Legend LEOS operating system sets new standard for digital applications • Provides user-friendly and wide variety of digital applications • One button for instant browsing hard disk, CD-ROM or memory stick for audio/ video/photo playing Legend Tianjiao Navigation computer model Digital home appliance model Application Operation Digital appliance control system Packaging technology Smart thermostat system Hardware

21. Business Review Development of terminal device (Cont’d) • Launch of new generation commercial PC  “Kaitian”6800 • Designed for commercial use, equipped with wireless Internet access, keyboard and mouse, 360 adjustable LCD monitor and VPN security system • The only model that won the "2002 Intel Innovative PC Award" • “Qitian”PC tailored for education sector • Leveraging application solutions to enhance sales of education PCs • “Qitian” is specifically designed for education purpose with features such as easy-to-assemble, smart recovery function, all-in-one mouse, chassis lock and the use of anti bacteria material

22. Business Review Development of terminal device (Cont’d) • Mobile handset • Smooth operation of the joint venture company, 6 months’ sales attained better-than-expected results • Rolling out various models of handsets, including colour screen handset i188, which was well received by the market • Leveraging on Legend’s brand name, Legend handset has become one of the most popular brands in China • Streamlining Legend’s handset distribution network, after-sales and maintenance services improved substantially G808 i188

23. Business Review Development of back office products • Servers • Shift business model from “product-centric” to “solution-centric” (VOLUME BUSINESSVALUE BUSINESS) • Specialize sales and service team • Successful development of server chip applications enhanced Legend’s capability in server design catering for customer needs • High Performance Computers • Developed China’s first super computer with world class computing speed • Enhance Legend’s overall server technology and product quality Wanquan Server Legend Deepcomp 1800 Supercomputer

24. Value-added service (Product pre-sales / after-sales services) • Consumers • Small & Medium scale clients • Large scale clients Service Business Business Review Services • Education, government and SMEs Small & Medium scale clients

25. Business Review Case study: e-Education Affiliated School Evolution of education informatization Large scale education network Long Distance Education Network Solution School Intranet Long Distance Education Network WAN e-classroom

26. Business Review Case study: e-Education Legend’s total solution for education sector e-School solutions Full range of education products School-Link solutions e-multimedia classroom solution Education Hardware Facility Solution Education Security Solution Teacher’s e-preparation room solution Education PCs, notebooks, servers, peripheral, storage & networking equipment Education Software Solution e-library solution Education Resources Solution e-multi function classroom solution Education Operation Solution Internet library solution Education Support & Training Solution e-office solution School e-security solution

27. Business Review Large scale clients: Established framework of IT service business Outsourcing Operation of IT system S.I. Application Implementation Consulting Telecom Banking Insurance Govt Vertical application Management System: ERP、SCM、CRM Horizontal application Infrastructure platform Infrastructure platform and security Others（Energy, publications, transport sector and etc）